ME PoV Spring 2014 issue

Up for the challenge

The Spring 2014 issue tackles several hot issues: from Expo 2020, the countdown to FATCA, women advancement in the Middle East, to meeting the skills challenge in the Middle East, technology in M&A transactions, procurement fraud and much more.

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About this issue

2014 is the year of the horse in the Chinese calendar and, according to predictions in the press, it is a year of upheavals: good for some, bad for others. But whether one believes in astrology and predictions or not, one cannot argue that it will be a good year for Dubai. Awakening from a harsh hit as a result of the 2008 financial crisis that has left much bigger economies in a slumber, Dubai has risen from the ashes to become the first country in the Middle East to host the World Expo in 2020, fighting off contenders such as Izmir and Sao Paolo.

Click the link on the left to access the Summer 2014 issue. Alternatively, you can read each article separately by clicking below.

Expo 2020

Following the United Arab Emirate’s bid to host the World Expo 2020 in Dubai under the theme “Connecting Minds, Creating the Future,” all eyes were focused on the Emirate awaiting the news of whether it would, in fact, be holding the hugely popular event. With the announcement of Dubai winning the bid, the entire GCC and Middle East markets gathered to celebrate the historic win, as the event had previously never been held in the Middle East. Boon or bane? We asked our experts to weigh in.

Facing up to FATCA...

By April 25, 2014, financial institutions across the Middle East will need to have entered into an agreement with the U.S. authorities (Internal Revenue Service or IRS) to comply with specific requirements set forth in the FATCA (Foreign Account Tax Compliance Act) regulations so as to avoid being subject to the penal 30 percent withholding on certain U.S.-sourced payments.One of these requirements is that each Foreign Financial Institution (FFI) will need to adopt a FATCA governance program and appoint a Responsible Officer who will take personal responsibility for FATCA compliance on its behalf. Non-compliance with FATCA could leave organizations and senior personnel open to significant financial and personal penalties. Appropriate action should be taken now.

Catching up to the West?

Catching up to the West is not only relegated to the domain of education. Women in the workforce, it is often thought, tend to be more prevalent in the western world than in developing countries. Or are they? Vanessa Borchers and Linda Human, global diversity leaders at Deloitte Touche Tohmatsu Limited, set out to challenge some common misconceptions about female leadership in emerging and growth markets. “Emerging and growth markets are facing significant challenges in terms of attracting and retaining talent,” they say in their article, Catching up to the West? but some of these challenges are different from those experienced by traditional markets, and they are not necessarily getting in the way of resilient women rising to the top.”

School’s out, now what?

Gulf Cooperation Council (GCC) governments are committed to policies of nationalization, but young people still seem focused on public sector jobs and those with the required technical qualifications are in short supply. Will this create a skills gap and, if so, how can it be filled in practice?

Procurement fraud

Major infrastructure activity is occurring over much of the Middle East with significant construction work being undertaken on behalf of government agencies in areas such as airport terminals, hospitals, port facilities and transport networks. In addition, multi-billion dollar projects are being undertaken in the oil and gas industry. But the incentive to win major contracts can lead individuals and even companies to engage in corrupt and fraudulent behavior. Staff within the procurement or project management divisions of contracting organizations may be exposed to inappropriate inducements such as bribes and corrupt offerings. So how does procurement fraud happen and who should be concerned?

Some common mistakes

One of the most critical issues for an investor to consider in a strategic acquisition is to estimate how much the company being acquired is worth. On the back of the 2008 financial crisis, a valuation is being looked at not just as a static value at a point in time, but more as a basis for developing a post-acquisition operation plan to drive value accretion and minimizing risk. As such, the Discounted Cash Flow (DCF) analysis is being more frequently used to value companies.

Deal maker or breaker?

For some major companies in the Gulf Cooperation Council (GCC) countries, including leading banks and financial institutions, information technology (IT) is taking a more central role in the business, not only in delivering superior performance but also as a source of defensible competitive advantage. As GCC firms continue to grow through mergers and acquisitions (M&A), the requirement to invest in technology-driven innovation has increased the prominence and visibility of information technology to board-level attention.

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